No Deal Reached with Minn. Lawmakers on Special Session

A closed-door meeting comprised of Minnesota's top lawmakers late Friday afternoon ended without a deal on a potential special session. There were even strong hints it might not happen at all.

Gov. Mark Dayton, Speaker of the House Paul Thissen, Senate Majority Leader Tom Bakk, House Minority Leader Kurt Daudt and Senate Minority Leader David Hann met at the Capitol for about an hour, but emerged without scheduling or shelving a special session.

The state's top Democrats and Republicans all said they want to avoid a special session, if possible. That would deny Republicans a chance to roll back the three new business-to-business taxes they've been pushing to repeal -- taxes on repairs of equipment and machines, telecommunications equipment purchases, and warehouse services.

But on Friday, Hann appeared OK with that.

"A special session is expensive. So we're looking at if there is a way to do it without a special session, and want to fully explore that," Hann said.

Beth Kadoun, the director of tax and fiscal policy for the Minnesota Chamber of Commerce, isn't interested in such exploration.

"We really want to fix this. We want to get these repealed," Kadoun said.

She said the new taxes are already taking a toll on the state's businesses.

"It really makes it very hard for them to be able to compete with this additional cost burden that is not imposed in most other states," Kadoun said.

"We think we should repeal this as soon as we can because we want to make sure we have Minnesota's economy as strong as we can have it," Kadoun said.

But Democrats said the sticking point is how to pay for the lost revenue if those taxes are tossed out.

"It's going to create a budget problem. So the question is kind of, 'Where would we find some new revenue to pay for those?'" Bakk said.

Lawmakers did agree that if there is a special session, it would start on September 9. Both sides said they will sit down again next week to continue the discussions.

If there is a special session, Democrats and Republicans agreed the top priority would be emergency aid for communities hit hard by June's severe storms.

The city of Minneapolis is still cleaning up tree damage. Officials said they hope the work will be done by Labor Day. But by then, the price tag could surpass $1 million.

City officials said the emergency money is badly needed.

"We've spent $1 million that we hadn't budgeted. We're entering our budget cycle for next year. We have to assume we're not going to get that money, and then, what impact does it have on other service delivery?" said Jayne Miller, superintendent of the Minneapolis Park & Recreation Board.

Lawmakers said they might be able to provide that emergency aid without holding a special session. They're looking into whether they can tap unused funds from previous disasters to plug the budget holes from this year's storms.